11 ms·

The Canadian Solution

38 points by jganetsk 18y ago

jsomers 18y ago
Oh boy... regardless of the strength of the argument here, I'm going to be sending this to virtually everyone I know. - a Canadian in America
trevelyan 18y ago
Worth pointing out that the fiscal accomplishments here are largely the political legacy of the Liberal Party, which is significantly to the left of the Democratic Party in the States. Stephen Harper, the current Prime Minister, is much closer to Bush than anyone else and is governing with 35% popular support. Many Canadians also find the election of Obama inspiring given their government.
- cperciva 18y ago
  the fiscal accomplishments here are largely the political legacy of the Liberal Party This isn't the right place for a debate about Canadian politics, so I'll just say this and leave the topic here: There's considerable disagreement about whether the Chretien/Martin Liberal government was responsible for the country's strong fiscal situation or whether they merely reaped the benefits of the policies (e.g., NAFTA and GST) put in place by the preceeding Conservative administration.
  - pedalpete 18y ago
    Though I agree this isn't the venue to debate politics, I don't think there is anything wrong with pointing out the politics in the situation, as long as we are not arguing that one side is correct, and the other incorrect. I think it would be irresponsible (and in some ways is on the part of Zakaria) to not include the impact of Canada's social infrastructure which acts as both a limit to growth, and is supportive in harsh times as these.
newt0311 18y ago
Canada 2008 real GDP growth rate: 0.7% US 2008 real GDP growth rate: 1.4%* Whats the point of not having bank failures when you earn less? Or another way to put it: whats the point of not loosing money if you don't have any to begin with. A more extreme example: During the 1930s, there was one notable country which did not experience an economic depression. That country was the USSR. As it had a command economy, the planners decided against a depression and that was it. However, they could not allocate agricultural resources effectively and had a famine instead. So, back then, it was very easy to say the the USSR is great as it has no depression but whats the point when they have no food. * Source: CIA world factbook (search google).
- cperciva 18y ago
  You're right, Canada's GDP growth in 2008 was 0.7% less than the US GDP growth. However in 2007, Canada's GDP grew by 2.7% vs. the US 2.2%; and the IMF predicts that in 2009 the US GDP will fall by 1.6% while Canada's GDP will only fall by 1.2%. These numbers fluctuate from year to year, but if you look at the long term trend, you won't see any significant difference between Canadian and US GDP growth.
jacquesm 18y ago
I've lived in Canada for 5 years, I have seen most of the country (that means, wherever there are roads) on road trips. Canada is poor, possibly very poor. On average the amount of money available per square kilometer of land is low, lower than some 'real' third world countries. This means that outside of the bigger population centers the infrastructure can be seriously lacking. Trade wars with the US (under the guise of infected beef, logging rules and whatever else the US can come up with to avoid real competition with Canadians, and that all in spite of 'nafta')) have wrecked a good part of the Canadian economy. One reason Canadian banks are in such good shape is that they have a captive audience, there is hardly any competition (there are very few banks in Canada and they all have - coincidene ? - roughly the same tarrifs for their services. They rip off their customers every chance they get, where else are you going to go ? Canadians are pretty much enslaved to their banks, I have no other words for it. The amount of misery caused by those 'healthy' banks that I've seen first hand is nothing short of unbelievable and I really would not wish the Canadian banking system upon anybody.
- katz 18y ago
  This is so true. South Africa is in the same situation – its banks are extremely strong (the majority of the UK Barkley Bank's assets is its stake in a South Africa bank). The reason why SA banks are so strong is that there is simply no competition. The banks ask what they want to and have an unspoken rule not to compete.
- gaius 18y ago
  The Canadian regulators are very reluctant to let Canadian banks or indeed any financial services firms be acquired by foreigners. Monopolies (or oligarchies) cannot exist without government support. Not that they're in such great shape now, but Joe (or Jacques) Canadian would probably be a lot better off if RBS, HSBC, Citibank and Santander had been allowed to roll up the regional banks.,
  - barrkel 18y ago
    What? Monopolies can very well exist without government support. Unless you're making the facile observation that government support includes not breaking up monopolies, there are natural monopolies that require no government support - namely, industries with very high fixed costs and little or nothing in the way of marginal costs. Consider in particular utilities which maintain expensive distribution networks.
patrickg-zill 18y ago
Another "America is Wrong" post from someone who doesn't know what he is talking about ... Zakaria didn't mention the CMHC or the recent $25 Billion (in a country whose population is 1/10th the USA) in non-bailout bailout money. See http://www.cbc.ca/money/story/2008/10/10/flaherty-banks.html http://www.cbc.ca/money/story/2008/10/10/flaherty-banks.html Aside: Southern Ontario, especially, depends on Detroit for much of its industrial base. Along the Highway 401 corridor from Whitby/Oshawa area on to Windsor there are many factories that produce one part or other that goes into your minivan. It is reasonable to believe that Canada will only start feeling the effects this year of the US spending slowdown. In addition to that, with oil prices lower (affects Alberta mostly) and construction down (affects Canadian lumber producers), one can expect that Canada will see some of the same problems that are already affecting the USA.
sanj 18y ago
Mortgages in Canada differ in two more important ways: 1. They are shorter term -- no longer than 7 years. 2. They are always adjustable. Both these items mean that banks can react much more quickly to market changes.
- chollida1 18y ago
  > 2. They are always adjustable. What do you mean here? I may just not be up on mortgage terminology but my mortgage is a 5 year fixed. How is it adjustable?
  - sanj 18y ago
    My info my be stale, but I was under the impression that all mortgages offered were adjustable in some way. But it sounds like I'm wrong!
- 3pt14159 18y ago
  You are incorrect. 1. There is no maximum term. I've heard of people getting 25 year terms, although they have a really high interest rate. The reason they did this is that they were on retirement income and needed to predict exactly how much they could afford month to month. See: http://www.ingdirect.ca/en/mortgages/index.html http://www.ingdirect.ca/en/mortgages/index.html For just one quick example of mortgages that go up to 10 years fixed. The main difference with Canadian mortgages is that they force you to pony up some capital AND there is none of this variable rate nonsense. Also, no securitization of mortgages. http://www.ingdirect.ca/en/mortgages/index.html http://www.ingdirect.ca/en/mortgages/index.html
- lazyant 18y ago
  A typical mortgage in Canada now is 4-5 years fixed plus the rest variable. You can also get all the mortgage full if you can afford it (probably makes little sense with the low rates). The whole term can go as far as 30 years. I think I saw a 40-year term too but I'm not sure.
anamax 18y ago
My rule for comparing two places is to look at what flows between them, especially people. This rule tells me that, on the whole, the US is a better place for people than Mexico. It also says that CA is becoming less attractive than the rest of the US. Which direction is net-migration between the US and Canada?
lazyant 18y ago
There's one inexactitude in the article: "Canada, by contrast, has no limit on the number of skilled migrants who can move to the country", that's not true. The government sets a goal number of skill immigrants every year and changes the points needed accordingly. At the end the number of applications approved are more or less the number planned. I'm one of those skill-class immigrants btw.

38 points by jganetsk 18y ago

Oh boy... regardless of the strength of the argument here, I'm going to be sending this to virtually everyone I know. - a Canadian in America

trevelyan 18y ago

Worth pointing out that the fiscal accomplishments here are largely the political legacy of the Liberal Party, which is significantly to the left of the Democratic Party in the States. Stephen Harper, the current Prime Minister, is much closer to Bush than anyone else and is governing with 35% popular support. Many Canadians also find the election of Obama inspiring given their government.

cperciva 18y ago
the fiscal accomplishments here are largely the political legacy of the Liberal Party This isn't the right place for a debate about Canadian politics, so I'll just say this and leave the topic here: There's considerable disagreement about whether the Chretien/Martin Liberal government was responsible for the country's strong fiscal situation or whether they merely reaped the benefits of the policies (e.g., NAFTA and GST) put in place by the preceeding Conservative administration.
- pedalpete 18y ago
  Though I agree this isn't the venue to debate politics, I don't think there is anything wrong with pointing out the politics in the situation, as long as we are not arguing that one side is correct, and the other incorrect. I think it would be irresponsible (and in some ways is on the part of Zakaria) to not include the impact of Canada's social infrastructure which acts as both a limit to growth, and is supportive in harsh times as these.

newt0311 18y ago

Canada 2008 real GDP growth rate: 0.7% US 2008 real GDP growth rate: 1.4%* Whats the point of not having bank failures when you earn less? Or another way to put it: whats the point of not loosing money if you don't have any to begin with. A more extreme example: During the 1930s, there was one notable country which did not experience an economic depression. That country was the USSR. As it had a command economy, the planners decided against a depression and that was it. However, they could not allocate agricultural resources effectively and had a famine instead. So, back then, it was very easy to say the the USSR is great as it has no depression but whats the point when they have no food. * Source: CIA world factbook (search google).

cperciva 18y ago
You're right, Canada's GDP growth in 2008 was 0.7% less than the US GDP growth. However in 2007, Canada's GDP grew by 2.7% vs. the US 2.2%; and the IMF predicts that in 2009 the US GDP will fall by 1.6% while Canada's GDP will only fall by 1.2%. These numbers fluctuate from year to year, but if you look at the long term trend, you won't see any significant difference between Canadian and US GDP growth.

jacquesm 18y ago

I've lived in Canada for 5 years, I have seen most of the country (that means, wherever there are roads) on road trips. Canada is poor, possibly very poor. On average the amount of money available per square kilometer of land is low, lower than some 'real' third world countries. This means that outside of the bigger population centers the infrastructure can be seriously lacking. Trade wars with the US (under the guise of infected beef, logging rules and whatever else the US can come up with to avoid real competition with Canadians, and that all in spite of 'nafta')) have wrecked a good part of the Canadian economy. One reason Canadian banks are in such good shape is that they have a captive audience, there is hardly any competition (there are very few banks in Canada and they all have - coincidene ? - roughly the same tarrifs for their services. They rip off their customers every chance they get, where else are you going to go ? Canadians are pretty much enslaved to their banks, I have no other words for it. The amount of misery caused by those 'healthy' banks that I've seen first hand is nothing short of unbelievable and I really would not wish the Canadian banking system upon anybody.

katz 18y ago
This is so true. South Africa is in the same situation – its banks are extremely strong (the majority of the UK Barkley Bank's assets is its stake in a South Africa bank). The reason why SA banks are so strong is that there is simply no competition. The banks ask what they want to and have an unspoken rule not to compete.
gaius 18y ago
The Canadian regulators are very reluctant to let Canadian banks or indeed any financial services firms be acquired by foreigners. Monopolies (or oligarchies) cannot exist without government support. Not that they're in such great shape now, but Joe (or Jacques) Canadian would probably be a lot better off if RBS, HSBC, Citibank and Santander had been allowed to roll up the regional banks.,
- barrkel 18y ago
  What? Monopolies can very well exist without government support. Unless you're making the facile observation that government support includes not breaking up monopolies, there are natural monopolies that require no government support - namely, industries with very high fixed costs and little or nothing in the way of marginal costs. Consider in particular utilities which maintain expensive distribution networks.

patrickg-zill 18y ago

Another "America is Wrong" post from someone who doesn't know what he is talking about ... Zakaria didn't mention the CMHC or the recent $25 Billion (in a country whose population is 1/10th the USA) in non-bailout bailout money. See http://www.cbc.ca/money/story/2008/10/10/flaherty-banks.html http://www.cbc.ca/money/story/2008/10/10/flaherty-banks.html Aside: Southern Ontario, especially, depends on Detroit for much of its industrial base. Along the Highway 401 corridor from Whitby/Oshawa area on to Windsor there are many factories that produce one part or other that goes into your minivan. It is reasonable to believe that Canada will only start feeling the effects this year of the US spending slowdown. In addition to that, with oil prices lower (affects Alberta mostly) and construction down (affects Canadian lumber producers), one can expect that Canada will see some of the same problems that are already affecting the USA.

sanj 18y ago

Mortgages in Canada differ in two more important ways: 1. They are shorter term -- no longer than 7 years. 2. They are always adjustable. Both these items mean that banks can react much more quickly to market changes.

chollida1 18y ago
> 2. They are always adjustable. What do you mean here? I may just not be up on mortgage terminology but my mortgage is a 5 year fixed. How is it adjustable?
- sanj 18y ago
  My info my be stale, but I was under the impression that all mortgages offered were adjustable in some way. But it sounds like I'm wrong!
3pt14159 18y ago
You are incorrect. 1. There is no maximum term. I've heard of people getting 25 year terms, although they have a really high interest rate. The reason they did this is that they were on retirement income and needed to predict exactly how much they could afford month to month. See: http://www.ingdirect.ca/en/mortgages/index.html http://www.ingdirect.ca/en/mortgages/index.html For just one quick example of mortgages that go up to 10 years fixed. The main difference with Canadian mortgages is that they force you to pony up some capital AND there is none of this variable rate nonsense. Also, no securitization of mortgages. http://www.ingdirect.ca/en/mortgages/index.html http://www.ingdirect.ca/en/mortgages/index.html
lazyant 18y ago
A typical mortgage in Canada now is 4-5 years fixed plus the rest variable. You can also get all the mortgage full if you can afford it (probably makes little sense with the low rates). The whole term can go as far as 30 years. I think I saw a 40-year term too but I'm not sure.

anamax 18y ago

My rule for comparing two places is to look at what flows between them, especially people. This rule tells me that, on the whole, the US is a better place for people than Mexico. It also says that CA is becoming less attractive than the rest of the US. Which direction is net-migration between the US and Canada?

lazyant 18y ago

There's one inexactitude in the article: "Canada, by contrast, has no limit on the number of skilled migrants who can move to the country", that's not true. The government sets a goal number of skill immigrants every year and changes the points needed accordingly. At the end the number of applications approved are more or less the number planned. I'm one of those skill-class immigrants btw.